Netflix has struck a deal with Danish fiber operator Waoo! to appear as part of the operators pay-TV offering. This is a first for Netflix. The agreements with Virgin Media (UK) and Com Hem (Sweden) both have the client integrated with an operator provided TiVo DVR. Waoo! integrates the client on the existing AirTies STB.

The Danish Jyllands-Posten* reports that Waoo! is the first TV distributor in Denmark to include Netflix as part of their TV package. Customers of Waoo! can sign-up for Netflix directly through the pay-TV operator. Once customers subscribes to the service, they can run the Netflix client on the existing operator set-top box.

Waoo! CEO Anders Christjansen, said of the deal: “We’d rather make Denmark’s best fiber broadband than try to make a streaming service to compete against the world best. My belief, and our view of where the market is moving, is that Netflix is here to stay.”According to Danish streaming media expert Claus Bulow Christensen, the deal is a big step for operators in the region. “The IPTV provider Waoo! has a full blown pay TV product, as well as a VoD service already running on the box,” he said. “Instead of being afraid of cannibalism, they invite what could look like a dangerous competitor to be part of their ecosystem.”

Anders Christjansen clearly believes that fiber broadband is the company’s primary service. This is something US operators such as Time Warner Cable have talked about. However, Waoo! is following through with concrete actions. Mr. Christjansen went on to say that the company is already co-operating with other Danish streaming services from TV 2 and Viasat (ViaPlay.)

The integration on the set-top box was an interesting challenge for Waoo!. The work was done by AirTies, the set-top box maker, and the middleware provider Nordija. According to sources close to the project, when a customer wants to watch video from Netflix the set-top box must reboot to load the Netflix client. This unusual and cumbersome arrangement is a demand of Netflix to accommodate the company’s strict content protection requirements.

Could this be a model for future integrations with operators around the world? Mr. Claus Bulow Christensen opined “I think that this kind of making old fashioned set-top boxes more hybrid, is something we will see more of worldwide.” However, here in the US the integration may be more difficult than with Waoo!, as the service is already IP-based. To accommodate most US cable STBs and systems, which are not IP-based, would require an entirely different approach.

Waoo! has a customer base of over 270,000 and an annually turnover of $90 million. Today about one third of all households in Denmark can get access to the fiber network owned by the company.

*The Jyllands-Posten article “Netflix expands their store in Denmark” was only available in the print edition (published THursday 31st of October 2013) at the time this piece was written.